Provides #4 share in Charlotte metro market CINCINNATI, Aug. 16
/PRNewswire-FirstCall/ -- Fifth Third Bancorp (NASDAQ:FITB) and
First Charter Corporation (FCTR) have signed a definitive agreement
under which Fifth Third will acquire Charlotte-based First Charter,
which operates 57 branches in North Carolina and 2 in suburban
Atlanta. This combination provides Fifth Third Bank an entrance
into the thriving Charlotte metropolitan market, and adds to its
small presence in Georgia, which it would acquire with its pending
R-G Crown Bank transaction announced in May. Terms of the agreement
call for Fifth Third Bancorp to pay $31.00 per First Charter share,
or $1.09 billion. Consideration would be paid in the form of 70%
Fifth Third common stock and 30% cash. "This furthers our
penetration into fast-growing Southeastern metropolitan markets at
a reasonable price," said Kevin Kabat, President and CEO of Fifth
Third Bancorp. "The addition of First Charter provides us with an
entry into the attractive North Carolina market and further
diversifies our footprint into new, higher growth markets. First
Charter is a very high-quality company, with a banking model that
emphasizes the strength of local decision-making. This fits
perfectly with our affiliate model, and I'm excited to welcome
First Charter associates to our team." Bob James, President and
Chief Executive Officer of First Charter, noted, "We are very
pleased to have chosen Fifth Third as our strategic partner. Given
their commitment to customer service and integration capabilities,
we expect a seamless transition for our customers." James also
noted, "First Charter customers will benefit significantly from the
transaction by becoming part of a financial organization which
offers a variety of additional products and services. We believe
this combination is a great result for our shareholders, customers
and employees, and look forward to becoming part of the Fifth Third
team." James will join Fifth Third as President of the Charlotte
affiliate. With the acquisition of First Charter, Fifth Third Bank
will add approximately $4.9 billion in assets and $3.2 billion in
deposits. In the Charlotte MSA, Fifth Third will have $2.2 billion
in deposits, giving it a 4th FDIC deposit market share, and in
Atlanta, Fifth Third adds $366 million in deposits. Fifth Third
also gains significant shares in smaller urban markets in the
Charlotte region. Fifth Third will have 57 retail locations and 134
ATMs in North Carolina, as well as 5 retail locations and 6 ATMs in
Georgia including R-G Crown locations. "First Charter expands our
presence in the Southeast, where we have focused recent acquisition
and de novo efforts. Given that First Charter represents a new
market for Fifth Third, we do not expect consolidation activity,"
said Kabat. "We have long had our eye on the Carolinas, and
Charlotte is a terrific new market for us. We also add a presence
in Atlanta, which enhances our positioning in Georgia when combined
with our Augusta presence. We would expect to build upon these
positions in each state with additional acquisitions and de novo
activity over time. First Charter will become a new Fifth Third
affiliate, based in Charlotte, which bridges our historical
footprint in the Midwest to our significant presence in Florida. We
expect significant productivity enhancements as we integrate First
Charter into our existing infrastructure and extend the Fifth Third
product set to First Charter employees and customers. Based on our
talks over the past months with Bob James, and our interactions
with First Charter's management team, we are very excited to bring
these talented and experienced professionals into the Fifth Third
family." The transaction, anticipated to close in the first quarter
of 2008, is expected to be dilutive to 2008 earnings per share by
approximately two percent, to be relatively neutral to 2009
earnings per share, and to be modestly accretive to 2009 earnings
per share excluding amortization of intangibles. The transaction is
expected to provide an internal rate of return of 14 percent for
Fifth Third shareholders. The purchase price for First Charter
represents a multiple of approximately 2.4x First Charter's book
value and 3.0x tangible book value, and a core deposit premium of
approximately 32%. Fifth Third Bank expects the merger to generate
$35 million pre-tax annual expense reductions ($22 million after
tax), phased in over two years. Fifth Third expects to incur
merger-related one-time charges of up to $61 million pre-tax ($39
million after tax), related to staff training, retention and
severance; real estate; systems integration; and other
miscellaneous accruals. Fifth Third Bank expects to continue to
target a 6.5% tangible common equity ratio following the closing of
the transaction. The transaction is not expected to significantly
affect Fifth Third's share repurchase plans, except during
customary blackout periods related to the transaction proxy period.
First Charter was advised by the law firm of Helms Mulliss &
Wicker, PLLC and the investment bank Keefe, Bruyette & Woods.
Fifth Third was advised by Hugh L. McColl, Jr. of McColl Partners
and Goldman Sachs & Co. A presentation describing this
transaction is available at http://www.53.com/ under the Investor
Relations page. About Fifth Third Bancorp: Fifth Third Bancorp
(NASDAQ:FITB) is a diversified financial services company
headquartered in Cincinnati, Ohio. The Company has $101 billion in
assets, operates 18 affiliates with 1,171 full-service Banking
Centers, including 105 Bank Mart(R) locations open seven days a
week inside select grocery stores and 2,146 Jeanie(R) ATMs in Ohio,
Kentucky, Indiana, Michigan, Illinois, Florida, Tennessee, West
Virginia, Pennsylvania and Missouri. Fifth Third operates five main
businesses: Commercial Banking, Branch Banking, Consumer Lending,
Investment Advisors and Fifth Third Processing Solutions. Fifth
Third is among the largest money managers in the Midwest and, as of
June 30, 2007, has $232 billion in assets under care, of which it
managed $34 billion for individuals, corporations and
not-for-profit organizations. Investor information and press
releases can be viewed at http://www.53.com/. Fifth Third's common
stock is traded through the NASDAQ(R) National Global Select Market
System under the symbol "FITB." About First Charter: First Charter
Corporation (NASDAQ:FCTR), headquartered in Charlotte, North
Carolina, is a regional financial services company with assets of
$4.9 billion and is the holding company for First Charter Bank.
First Charter operates 59 full-service financial centers, four
insurance offices, and 137 ATMs in North Carolina and Georgia, and
also operates loan origination offices in Asheville, North Carolina
and Reston, Virginia. First Charter provides businesses and
individuals with a broad range of financial services, including
banking, financial planning, wealth management, investments,
insurance, and mortgages. Forward-Looking Statements This press
release may contain forward-looking statements about Fifth Third
Bancorp and/or the company as combined acquired entities within the
meaning of Sections 27A of the Securities Act of 1933, as amended,
and Rule 175 promulgated thereunder, and 21E of the Securities
Exchange Act of 1934, as amended, and Rule 3b-6 promulgated
thereunder, that involve inherent risks and uncertainties. This
press release may contain certain forward-looking statements with
respect to the financial condition, results of operations, plans,
objectives, future performance and business of Fifth Third Bancorp
and/or the combined company including statements preceded by,
followed by or that include the words or phrases such as
"believes," "expects," "anticipates," "plans," "trend,"
"objective," "continue," "remain" or similar expressions or future
or conditional verbs such as "will," "would," "should," "could,"
"might," "can," "may" or similar expressions. There are a number of
important factors that could cause future results to differ
materially from historical performance and these forward-looking
statements. Factors that might cause such a difference include, but
are not limited to: (1) general economic conditions, either
national or in the states in which Fifth Third, one or more
acquired entities and/or the combined company do business, are less
favorable than expected; (2) political developments, wars or other
hostilities may disrupt or increase volatility in securities
markets or other economic conditions; (3) changes in the interest
rate environment reduce interest margins; (4) prepayment speeds,
loan origination and sale volumes, charge-offs and loan loss
provisions; (5) our ability to maintain required capital levels and
adequate sources of funding and liquidity; (6) changes and trends
in capital markets; (7) competitive pressures among depository
institutions increase significantly; (8) effects of critical
accounting policies and judgments; (9) changes in accounting
policies or procedures as may be required by the Financial
Accounting Standards Board or other regulatory agencies; (10)
legislative or regulatory changes or actions, or significant
litigation, adversely affect Fifth Third, one or more acquired
entities and/or the combined company or the businesses in which
Fifth Third, one or more acquired entities and/or the combined
company are engaged; (11) ability to maintain favorable ratings
from rating agencies; (12) fluctuation of Fifth Third's stock
price; (13) ability to attract and retain key personnel; (14)
ability to receive dividends from its subsidiaries; (15)
potentially dilutive effect of future acquisitions on current
shareholders' ownership of Fifth Third; (16) effects of accounting
or financial results of one or more acquired entity; (17)
difficulties in combining the operations of acquired entities; (18)
ability to secure confidential information through the use of
computer systems and telecommunications network; and (19) the
impact of reputational risk created by these developments on such
matters as business generation and retention, funding and
liquidity. Additional information concerning factors that could
cause actual results to differ materially from those expressed or
implied in the forward-looking statements is available in Fifth
Third's Annual Report on Form 10-K for the year ended December 31,
2006, filed with the United States Securities and Exchange
Commission (SEC), as amended. Copies of this filing are available
at no cost on the SEC's Web site at http://www.sec.gov/ or on Fifth
Third's web site at http://www.53.com/. Fifth Third undertakes no
obligation to release revisions to these forward-looking statements
or reflect events or circumstances after the date of this press
release. This press release also contains statements about First
Charter, a proposed merger of First Charter with or into Fifth
Third and a distribution to First Charter's shareholders of either
cash, Fifth Third common stock or a combination thereof. These
statements are not historical facts and are considered
forward-looking within the meaning of the Private Securities
Litigation Reform Act of 1995. These statements are based upon
current expectations, forecasts and assumptions that are subject to
risks, uncertainties and other factors that could cause actual
outcomes and results to differ materially from those indicated by
these forward-looking statements. These risks, uncertainties and
other factors include, but are not limited to: the satisfaction of
the closing conditions in the merger agreement, including the
receipt of shareholder and regulatory approvals; the risk that the
merger will not close; the risk that customer and employee
relationships may be disrupted by the merger, or in the event the
merger does not close; the reactions of First Charter's customers
to the merger; possible changes in economic and business conditions
and other risks detailed from time to time in First Charter's
reports filed with the Securities and Exchange Commission,
including its Annual Report on Form 10-K for the year ended
December 31, 2006. First Charter does not undertake any obligation
to update these forward- looking statements. Where You Can
Additional Information About The Merger The proposed Merger will be
submitted to First Charter's shareholders for consideration. Fifth
Third will file a Form S-4 Registration Statement, First Charter
will file a Proxy Statement and both companies will file other
relevant documents regarding the Merger with the Securities and
Exchange Commission (the "SEC"). First Charter will mail the Proxy
Statement/Prospectus to its shareholders. These documents, and any
applicable amendments or supplements, will contain important
information about the Merger, and Fifth Third and First Charter
urge you to read these documents when they become available. You
may obtain copies of all documents filed with the SEC regarding the
Merger, free of charge, at the SEC's website (http://www.sec.gov/).
You may also obtain these documents free of charge from Fifth
Third's website (http://www.53.com/) under the heading "About Fifth
Third" and then under the heading "Media and Investors-Investor
Relations" and then under the item "SEC Filings." You may also
obtain these documents, free of charge, from First Charter's
website (http://www.firstcharter.com/) under the section "About
First Charter" and then under the heading "Investor Relations" and
then under the item "Financial Reports / SEC Filings." Participants
in The Merger Fifth Third and First Charter and their respective
directors and executive officers may be deemed participants in the
solicitation of proxies from First Charter's shareholders in
connection with the Merger. Information about the directors and
executive officers of Fifth Third and First Charter and information
about other persons who may be deemed participants in the Merger
will be included in the Proxy Statement/Prospectus. You can find
information about Fifth Third's executive officers and directors in
its definitive proxy statement filed with the SEC on March 9, 2007.
You can find information about First Charter's executive officers
and directors in its definitive proxy statement filed with the SEC
on March 25, 2007. You can obtain free copies of these documents
from the websites of Fifth Third, First Charter or the SEC.
DATASOURCE: Fifth Third Bancorp CONTACT: Analysts: Jeff Richardson
of Fifth Third Bancorp, +1-513-534-0983; or Media: Debra DeCourcy,
APR of Fifth Third Bancorp, +1-513-534-4153, or Stacie Hicks of
First Charter, +1-407-688-4557 Web site: http://www.53.com/
http://www.firstcharter.com/
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